Major drop in global wages since 2012: UN report

Major drop in global wages since 2012: UN report

Geneva (Online): A United Nations report claimed that Global wage growth has slowed notably, an agitating growth that could accelerate further inequality and suppress consumption globally.

A dramatic slowdown in the developing world is the key driver of the trend, the UN's International Labour Organization said in the report.

According to the report, published by the ILO, since 2008 every two years, the organization looks at worker compensation in all regions and aims to offer a broad view of where the world is headed in terms of household income and consumer purchasing power.

ILO said in a statement that overall wage growth around the world has decelerated since 2012 from 2.5 percent to 1.7 percent in 2015, the lowest level in four years.

ILO deputy director for policy Deborah Greenfield called those figures "a matter of major concern."

Following the 2008 financial crisis, global wage growth was sustained by a strong performance in developing nations, notably places like Brazil, India and South Africa.

Greenfield said, “The apparent "catching up" by poorer nations raised hopes of more global equality.”

Greenfield told reporters in Geneva that progress has slowed down, perhaps even halted, noting the exception of China where wages were still growing significantly faster than elsewhere.

Patrick Belser, the report's lead author said, problems in developing nations have partly been driven by the collapse in oil and commodity prices.

The report found that wages in richer nations had been growing at a better pace although Greenfield warned that progress there remained tenuous as "growing economic, social and political uncertainty" in the developed world could derail gains made.

The report also highlighted glaring gender pay gaps and discrepancies between executives and junior staff compensation.

In Europe, women were on average making 20 percent less than men per hour, ILO said. At the executive level, European women are paid roughly 50 percent less their male counterparts.

In an analysis of selected high-paying companies, ILO found that the bottom one percent of workers made an average of 7.10 Euros ($7.40) per hour, while the top one percent of workers made 844 Euros per hour.

Greenfield said, "We don't see huge progress in dealing with inequality. In fact we see the reverse."